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LIPA Rolls Out New Rates

Thu, 04/06/2023 - 11:35

The Long Island Power Authority’s board of trustees voted on March 29 to implement a standard time-of-day rate and optional “super off-peak rate” for residential customers on Long Island and in the Rockaways starting in 2024. Its customers will have the option to remain on a flat rate.

LIPA also announced that customers will be eligible for a one-year “bill protection guarantee,” meaning they will receive a bill credit if they would have paid less on a flat rate than on a new rate, according to a March 29 statement.

Under the time-of-day rate, customers will pay differently for electricity: rates will be higher during peak hours — weekdays from 3 to 7 p.m. — but lower during all other hours of the day as well as on weekends and holidays. Rates will be further discounted in the super off-peak hours of 10 p.m. to 6 a.m.

Electricity rates will be highest from 3 to 7 p.m. on weekdays between June 1 and Sept. 30.

LIPA asserts that most customers will pay the same or less under the time-of-day rate or super off-peak rate without changing their electricity usage or habits, as those customers already conduct most activity during off-peak hours.

Customers, according to a LIPA fact sheet, can save money by moving activities such as laundry and charging electric vehicles to off-peak hours, with the discounted rates representing 88 percent of the hours throughout a year.

Customers will save an average of around $3.50 per month on the time-of-day rate and $5.50 per month on the super off-peak rate compared to the flat rate, according to the fact sheet, without changing their daily activity. But the utility asserts that customers could save close to $150 per month in the summer by moving their use of appliances such as dishwashers, washing machines, electric dryers, swimming pool pumps, and electric vehicle chargers to the super off-peak hours. 

According to LIPA, electricity generated during off-peak hours results in fewer carbon emissions than that generated to serve peak demand, as diesel-powered “peaker” plants used to generate electricity during periods of peak demand are less efficient than plants optimized to run continuously. The capacity and use of peaker plants will be lessened by reduced demand during peak periods, according to the agency’s statement.

PSEG Long Island, which manages the grid for LIPA, will conduct outreach to customers before they are transitioned into the new rate. Customers will receive 90, 60, and 30-day notices. Customers will be migrated into the new rate plan in phases beginning next year and continuing through 2025.

A LIPA spokeswoman did not reply to an email seeking additional information. But Lynn Arthur, the founder of Peak Power LI, which helps municipalities develop renewable energy policies, was skeptical of the utility’s claims about cost savings. She questioned how many customers would save money under time-of-day rates given daily tasks like EV charging and use of things like a clothes dryer, oven, hair dryer, “and what about your heat pump and central air-conditioner which runs on electricity?”

“Only those households who get up, leave the residence, and don’t get home until after 7 p.m. will benefit,” she said. “Over the last three years the work force doesn’t drive to the office anymore. They work at home, where they use electricity during peak hours.”

Time-of-day pricing, Ms. Arthur said, “only works when your house is empty and you don’t turn anything on until after 7 p.m.”

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